What time does your client’s termination-option period end?

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01/08/2016 | Author: Editorial Staff

I know my buyer’s termination option ends on Thursday, but at what time?

The termination option ends at 5 p.m. local time to where the property is located. The Texas Real Estate Commission revised its contracts effective January 1, 2016, to implement this time deadline. 

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Categories: Forms, Legal
Tags: legal, legal faq, forms, contracts, trec forms, termination option period, option period


Comments

Robert Garcia on 01/18/2016

I have no problem with this.  I have actually had a transaction where the buyer’s agent got slick and sent an amendment and termination trying to back my client into a corner at 11:50 p.m.  I anticipated this and called the agent right away.  I had permission to cut the contract into a million pieces if the buyers agent didn’t shape up.  He did and we went to closing, but the right way to conduct business is to remember that time is of the essence and watch your dates and times.  People are much more willing to conduct business if afforded some time to do so.  I know it can cut close sometimes, but this change shouldn’t effect real professionals and willing buyers and sellers.  Purposely waiting until midnight is a sign of unprofessionalism, even if you had the right to do so.

Sharolyn Woodard on 01/18/2016

I welcome the timeline change to the option period.  I have had a few instances where
I received notice of cancellation close to midnight.  Then I had to let sellers know the next morning.  In my opinion, receiving information earlier in the evening like any other business transaction is great.

Hal Stark on 01/15/2016

Why fret over the option period.  The change does not change anything but the expiration time.  Agents should have consulted with the buyers and determined the best date based on their situation.  Having agreement with the seller and then the agents makes sure the time line is met.  I understand the time line difference between midnight and 5pm, but with quality follow-up this would present no problem.  If you have a contract it’s critical that it’s details are reviewed daily or place reminders in you smart phone to address any situation—before the deadline.

MARIA ELENA CHAVEZ on 01/15/2016

5pm or midnight makes no difference.Buyer has option of either making their option time longer, or extension of option time. Whatever they decide ,not leaving thing for the last minute ,will help process be less stressful.

John on 01/15/2016

This is ridiculous. It’s one more non standard item to remember. It will also put pressure on agents representing sellers to work into the night when a contract is terminated instead of putting a home back on the market during regular hours the next morning.
Ugh!

MARIA E CHAVEZ on 01/15/2016

Answer to Marie Garza, :
The option time can always be ,either set for longer time for buyers to have enough time ,or theres always an option of extension. Time is of essence, .Doesn t matter if its a 5 or midnight,doing your homework with enough time will help the process be less stressful.

Lisa Longoria on 01/15/2016

I think this is a great change and will result in better planning and less game playing.

James on 01/15/2016

My wife and my life thank you for this change!!!! There is nothing more frustrating than agents and consumers who treat our time like we’re convenient store attendants just waiting around for them to make a decision.

As to the argument, “My 9-5 clients won’t have time. ” Give me a break. Breakfast, lunch, or a 15 minute break during the work day are all that is required to huddle-up and make an informed decision about the final details of an amendment or response.  I HIGHLY recommend adding several inspectors to your vendor list so you can be sure to get an inspection on 1st or 2nd day of option.

RDG on 01/15/2016

This is a good move. The only time I am waiting after 5 PM on the last day is because the seller is playing “chicken” with the buyer’s amendment. My buyers aren’t so indecisive that they need those last few hours except when the seller doesn’t address the amendment. Also 3-5 day option period is a really bad idea on the buyer’s side. If one has the buyer, 7-10 is the minimum option period and the first 7 go by like lightning.

Rachel Murray on 01/14/2016

I am fine with the change. Everyone will just adjust their way of working like we do with every other change. Tensions run high late at night and it is always stressful.  I have used my negotiation skills and coach my clients to avoid it most of the time now anyway. It doesn’t have anything to do with age, just experience Lane. Why work that way when you can work a better way.

Marie Garza on 01/14/2016

This change is not favorable to the buyers that are tied to their 9 to 5 jobs.  Unfortunately they no longer have that midnight cushion to make that important last minute decision.  A disservice to the buyer…

T. Ford on 01/14/2016

Yes,  this is good and should not hinder any contract

Sandy Maltese on 01/14/2016

I am so happy about this time change!! No more staying up until midnight!!!

MARIA ELENA CHAVEZ on 01/14/2016

5:00 pm deadline should be no issue. Option time depends on Buyer and Seller.
Depending on the situation ,if buyer is willing to definitely take the house as is, after negotiating the price, I still think its better to have at least 3-5 days in case they want to back out. If they are doing an inspection 10 -18 days. have time to inspect ,time to have estimates on repairs. Same is 5;00pm as midnight.

Carmen Cowles on 01/14/2016

So the cut off time now is 5:00 p.m.?

Anthony Mendoza on 01/14/2016

Typo…21 years of service….not 25.  feels like 125…lol ... many blessing ☺

Anthony Mendoza on 01/14/2016

See….Now…. you see the issue for my city. If sellers are getting smarter and most of them are with the option period days….what are we to do…. the percentage of those seller are extremely high here…...firm on their 3-5 days options (with my clientele$$$$...... per their attorneys advice!!!!! The worst.lol)  Its getting harder…  im a strong negotiator but what choice do we have ..... inventory will be very limited for buyers…. I do slam the 3-5days and get it done every time… on time…all the time…. but man its getting exhausting….. I’ve been a full time agent for 25 years…. thank God Im ready to retire and sip lemonades by the pool side at 39.  LOL…. enjoyed the discussion guys… Many blessing ☺

Charli Still on 01/14/2016

Anthony, what you’re discussing is a market driven issue that cannot be corrected by an extra 7 hours.  If you accept a shorter option period than you can comply with, those hours won’t matter.  I don’t know the solution to your problem, & agree a 3 day option period is unrealistic, but leaving it open until midnight doesn’t fix it, and makes it more difficult logistically for everyone.

Brenda Venable on 01/14/2016

Anthony:

Sorry but 3 to 5 days is not enough time for inspections,  reviewing, and making a final decision. Seven days is actually pushing it and 10 is more realistic. This sounds like a mix for a disaster. Last year 10 days wasn’t enough because the inspectors were slammed. Sometimes you were waiting a few days just to get on their schedule. A seller is not loosing anything during the OP period. If a buyer really wants a place they can do a back up., I personally will not rec’d 3-5 days for anybody. No more than 10 is reasonable.

Anthony Mendoza on 01/14/2016

““Typically a 7-10 day of option period”“” Brenda…(previous post)  San Antonio is now commonly having 3-5 day option periods as the norm seller are getting smarter and smarter withan the negotiated days .... so even the extra couple of hours help tremendously. And the 3-5 day are usually for the same amount of a negotiated option fee $$$$ a 7-10 would normally cost…  it harder on the brokerage firm listing agents, buyers agent, contractor estimates, and branch owners as myself.

Brenda on 01/14/2016

So sorry should say GOOD. I don’t know how that happened (go..lol)

DIANA ALDERMAN on 01/14/2016

5:00 PM is a great change.  Sellers and their agents will no longer be held hostage by inconsiderate buyers until Midnight on the last day of the option.

As a Realtor with 39 yrs. experience, the greatest thing that every happened to the Earnest Money Contract was the creation of the Option Period.  It is the best Buyer’s Beware period that we could ever have.

Prior to the creation of the option, negotiations regarding repairs could go on for as long as 30 days————very trying for the sellers, buyers and their agents.

The good news:  It is a rare occasion to see a buyer back out after the option period.

Charlie Still on 01/14/2016

This is one of the best changes ever made.  The only buyers or sellers who were waiting late in the evening of the last day before agreeing, terminating or attempting to extend were generally vindictive & trying to “punish” someone.  Yes we will work after 5:00 PM, but why should the agents & buyers & sellers wait for a decision that can be made at a more reasonable time.  Save the late nights for issues that cannot be avoided.  This can be avoided & now it is.  You’re welcome!

Trey Mills on 01/14/2016

A very good change and long overdue.  Just common sense and good business etiquette.

Brenda on 01/14/2016

Go gosh guys..you have 7 days/10 days. just get it together by 5:00 the day of OP. I personally try and get it done before the last day of option period. No one needs to stay up until midnight to finalize decisions.

Anthony Mendoza on 01/14/2016

Not good ......not good at all! The midnight dead line has always been important especially with my sellers….. it allows repair contractors to get us stuff after normal business hours.  A number of other reasons can be added to the list for both sides as well as the ReaL Estate Professionals.

Dale Ross on 01/14/2016

Although, as strictly a listing agent I use my negotiation skills to allow very few transactions to go to the last day of option, I agree with you Lane.

I see complaints against this improvement but without reasoning.  Yawn….

MARY ANN LIPSEY on 01/14/2016

I think that’s a good idea and easy to remember.  5PM is when business shuts down in most places…

Mary Neal on 01/11/2016

I think this Change is Best thing Ever. Thank You!!
Does not mean Buyers will still Not be waiting til 4:59 make a Decision, beats Better STAYING in till 11:59 Before—Happened Once in my 12 Year Career- Never Again! As a Matter of Fact this Particular Buyer Terminated the Contract, and Next Day, Her Mother Buyer Wanted the House Back.  Seriously?  I said, I Don’t Know if This Possible, Will Ck with the Realtor , See if their Bank Approve It ? This was a Short Sale, Which I Normally Not Work—Issues Involved (2nd one) Guess What?  You can get the House Back, Amend the Existing One as it Originally Was Their Condition and Continue.
After All That—Buyer Winded Up Terminating Contract—Too Much Money Needed for Repairs, Could Submitt Less Price. Guess What ? Buyer was Lucky - She did get her Ernest Money Back! BAD EXPRIENCE!! I Later Saw that Same Listing Sold—Was Totally Redone—Was For Lease.
Realtors,  My Thought—Get Back to Basics—Listing is the Name of Game!! Have INVENTORY—  SEEMS LESS Problems—Trust Me!!! Have Good Listings—Wait for Offers Come In—Showings SELL Your Inventory and Selling QUICKLY.  WHY NOT?  I Never had a BAD Experience Will Sellers.

Bob on 01/09/2016

Lane,
It’s a horrible rule. Randomly chosen timeline because of a few complaints. All other deadlines are at midnight and this should not have been put into place

Lane Mabray on 01/09/2016

OK, Bob and Andy, I guess my working starting at 7 a.m. in the morning means we have to work til midnight? is that what you do? I don’t and don’t need to anymore….I guess “over the hill” means what to you??? Insulting long term experienced real estate agents gets you lots of “brownie points” and lots of commissions?

Bob on 01/09/2016

I’ll have to admit, when I first heard that trec was considering this I thought it was a joke. 
I’m beginning to think that the Realtor community is aging too rapidly. 
This is a bad rule, made to appease a few over the hill realtors who don’t want to stay up past 5:00pm maybe a few times a year, max?
All other deadlines in the contracts are at midnight, aren’t they? They should have left it alone.

Andy on 01/09/2016

What about all the other deadlines. like finance option. They still end at midnight…....
Sorry Lane Mabry, still gotta stay up for those.

Irene Pence on 01/09/2016

While the OP expiration time frame and the revised TREC 1-4 contract became mandatory for use on/after 1/1/2016, the new contract was available for use on a voluntary basis in December 2015.  If your transaction used the new contract prior to 1/1/16 then the expiration of your OP is as stated in the new contract, or 5PM local time, regardless of the effective date.

Rod Johnson on 01/09/2016

Guess that means I can’t be that annoying buyers agent anymore! Good thing I’m transferring my focus to listings this year! Thanks TREC 4696604000 .(JavaScript must be enabled to view this email address) #RodTheRealtor #jfaucette #JoeAtkinsRealty

Lane Mabray on 01/08/2016

Thank goodness!! finally a positive change….No one wants to stay up til midnight…

Ann Runnels on 01/08/2016

Good comment   David.
I agree. My comment refers to the change.
It has been needed for awhile.
Finding sellers and buyers at the midnight time was impossible. In the past I have been making sure mine were acted upon by buyers during business hours as a matter of practice. I explain that to make sure their money is protected, I try to do it early on the last day. With Elec signatures it is easier but many buyers want to wait til the deadline to terminate. Thanks for the change

David Davis on 01/08/2016

Assuming the contract effective date was on or after January 1, then at 5PM on the ending date local time at the time zone where the property is located, if the effective date of the contract was before January 1, 2016 then at midnight on the ending date.


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